It’s easy to understand why investors remain curious about AI penny stocks in December and beyond. Leading companies in the artificial intelligence (AI) industry have multiplied in value in 2023.  

The AI market was worth roughly $515 billion in 2023. By 2030, it is expected to more than quadruple in value, reaching $2.025 trillion. That equates to a compound annual growth rate of more than 21% over the period.

So, it’s easy to see why investors are scrambling to invest in undervalued penny in the space: they have massive potential to provide outsized returns that can easily multiply capital invested. With that said, let’s take a look at the best AI penny stocks to buy right now.

Himax Technologies (HIMX)

Himax Technologies (NASDAQ:HIMX) Is a semiconductor firm with a footprint that touches on AI. It’s also a share that trades for roughly $5.50 at the moment. It’s a more stable choice among AI penny stocks with analysts expecting that it can grow by roughly 35% in the next year or so. 

The company’s most recent earnings report strongly suggests that it is a fundamentally sound firm. Third quarter revenues reached $238.5 million. That translated to 1.5% growth on a quarter-over-quarter basis. While that might not sound great, it was actually a strong performance given that the company’s guidance projected a 7% decline during the period and at best a flat performance.

The company’s largest revenue provider by sector is the automotive industry. The company notes that it is facing ongoing macro headwinds and given its recent outperformance, there’s a reason to be optimistic. Thus, the company  will continue to be a strong choice for investors seeking secular exposure to the continued growth of the electric vehicle market.

Guardforce AI (GFAI)

I mentioned that I believe Himax Technologies is somewhat of a stable, low risk choice. Guardforce AI (NASDAQ:GFAI) is the stock that is somewhat nearer the middle of the road in terms of risk. For example, 6.7% of its float is currently sold short. That is not a particularly high percentage but it does suggest that many investors do anticipate its value falling.

At the same time however, the stock has massive potential based on the sole analyst with coverage of its shares. That analyst expects the stock to rise to $14 at some point in the future. It currently trades for $3.35, making its appeal obvious.

As you might have guessed by its name, Guardforce AI provides cyber security solutions that have integrated AI. There’s at least one piece of data that I could find which suggests that its shares are worth more than their current price. The company recently converted $13.4 million worth of debt into 2,947,150 restricted shares. That equates to a value of $5.40 per share.

Guardforce AI reported 18.4 million in revenues during the first half of 2023, an 8.7% increase. 

The company  continues to report net losses and serve the client base primarily located in Asia. So, there are some inherent risks but the upside remains clear.

Lantern Pharma (LTRN)

Lantern Pharma (NASDAQ:LTRN) is a biopharmaceutical stock and company that utilizes AI and machine learning in order to develop its pipeline of drugs. The company has multiple clinical stage programs. 

Like all pharma stocks, investing in Lantern Pharma is inherently risky. That’s simply a caveat that all investors should consider. Many other biopharma companies are also heavily investing in AI and machine learning in order to expedite their drug discovery and development processes. Lantern Pharma is not unique in that regard. 

There’s nothing that particularly stands out about Lantern Pharma relative to other firms in this space that also utilize AI. That said, the company is well funded and maintained more than $44 million in liquidity reserves based on its most recent earnings report. Meanwhile, the company burned through just over $2 million during the period. That indicates that Lantern Pharma will continue to develop its pipeline of drugs utilizing AI in a way that won’t bankrupt the firm.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.